Category: New Issues

New Issues

New Issue: AX FixedReset 5.25%+446 US PAY

Artis Real Estate Investment Trust (TSX: AX.UN) has announced:

a marketed public offering (the “Financing”) of approximately US$50 million Cumulative Rate Reset Preferred Trust Units, Series C (the “Series C Units”) at a price of US$25 per Series C Unit. The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”). Artis has also granted the Underwriters an over-allotment option, exercisable at any time up to 30 days after the closing of the Financing, to purchase additional Series C Units, up to an amount equal to 15% of the number of Series C Units sold pursuant to the Financing. The Financing will be priced in the context of the market with the final terms of the Financing to be determined at the time of pricing.

The Series C Units will pay fixed cumulative preferential distributions, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five and a half-year period ending March 31, 2018. The first quarterly distribution, if declared, shall be payable on December 31, 2012. The distribution rate will be reset on March 31, 2018 and every five years thereafter at a rate equal to the sum of the then five-year United States Government bond yield and a spread which will be set upon pricing of this Financing. The Series C Units are redeemable by Artis, at its option, on March 31, 2018 and on March 31 of every fifth year thereafter.

Holders of Series C Units will have the right to reclassify all or any part of their Series C Units as Cumulative Floating Rate Preferred Trust Units, Series D (the “Series D Units”), subject to certain conditions, on March 31, 2018 and on March 31 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement). Holders of Series D Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 3-month United States Government Treasury Bill yield plus a spread which will be set upon pricing of this Financing.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012. The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

They also announced:

that is has priced its previously announced marketed public offering (the “Financing”) of Cumulative Rate Reset Preferred Trust Units, Series C (the “Series C Units”). Artis will issue 3.0 million Series C Units at a price of US$25 per Series C Unit for gross proceeds to Artis of US$75,000,000.

The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”).

The Series C Units will pay fixed cumulative preferential distributions of US$1.3125 per unit per annum, yielding 5.25% per annum, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five and a half-year period ending March 31, 2018. The first quarterly distribution, if declared, shall be payable on December 31, 2012 and shall be US$0.3740 per unit, based on the anticipated closing of the offering of Series C Units of September 18, 2012. The distribution rate will be reset on March 31, 2018 and every five years thereafter at a rate equal to the sum of the then five year United States Government bond yield and 4.46%. The Series C Units are redeemable by Artis, at its option, on March 31, 2018 and on March 31 of every fifth year thereafter.

Holders of Series C Units will have the right to reclassify all or any part of their Series C Units as Cumulative Floating Rate Preferred Trust Units, Series D (the “Series D Units”), subject to certain conditions, on March 31, 2018 and on March 31 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement).

Holders of Series D Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 3-month United States Government Treasury Bill yield plus a spread of 4.46%.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012.

The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Financing is expected to close on or about September 18, 2012 and is subject to regulatory approval.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

It is my understanding that the shares are not rated and that there is no current intention to rectify this matter.

New Issues

New Issue: BPO FixedReset 4.60%+316

Brookfield Office Properties has announced:

that it has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets, Scotiabank and TD Securities Inc., for distribution to the public, eight million Cumulative Class AAA Rate Reset Preference Shares, Series T (the “Preferred Shares, Series T”). The Preferred Shares, Series T will be issued at a price of C$25.00 per share, for aggregate proceeds of C$200 million. Holders of the Preferred Shares, Series T will be entitled to receive a cumulative quarterly fixed dividend yielding 4.60% annually for the initial period ending December 31, 2018. Thereafter, the dividend rate will be reset every five years at a rate equal to the five-year Government of Canada bond yield plus 3.16%.

Holders of Preferred Shares, Series T will have the right, at their option, to convert their shares into Cumulative Class AAA Preference Shares, Series U (the “Preferred Shares, Series U”), subject to certain conditions, on December 31, 2018 and on December 31 every five years thereafter. Holders of Preferred Shares, Series U will be entitled to receive cumulative quarterly floating dividends at a rate equal to the 90-day Government of Canada Treasury Bill yield plus 3.16%.

Brookfield Office Properties has granted the underwriters an option, exercisable in whole or in part anytime up to two business days prior to closing, to purchase an additional two million Preferred Shares, Series T at the same offering price. Should the option be fully exercised, the total gross proceeds of the financing will be C$250 million.

The Preferred Shares, Series T will be offered by way of a prospectus supplement to the short-form base shelf prospectus of Brookfield Office Properties Inc. dated January 3, 2012. The prospectus supplement will be filed with securities regulatory authorities in all provinces of Canada.

The net proceeds of the issue will be used to redeem Brookfield Office Properties’ Cumulative Class AAA Preference Shares, Series F and, to the extent the underwriters’ option is exercised, for general corporate purposes. The offering is expected to close on or about September 13, 2012.

BPO has the following series of FixedResets already outstanding:

BPO FixedResets Outstanding
2012-9-4
Ticker Initial
Dividend		 Issue
Reset
Spread		 Next
Reset
Date
BPO.PR.L 1.6875 417 2014-9-30
BPO.PR.N 1.5375 307 2016-6-30
BPO.PR.P 1.2875 300 2017-3-31
BPO.PR.R 1.275 348 2016-9-30

Update: Rated Pfd-3(high) by DBRS.

New Issues

New Issue: ENB FixedReset 4.00%+250

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 10 million cumulative redeemable preference shares, series P (the “Series P Preferred Shares”) at a price of $25.00 per share for distribution to the public. Closing of the offering is expected on September 13, 2012.

The holders of Series P Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding March 1, 2019. The first quarterly dividend payment date is scheduled for December 1, 2012. The dividend rate will reset on March 1, 2019 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.50 per cent. The Series P Preferred Shares are redeemable by Enbridge, at its option, on March 1, 2019 and on March 1 of every fifth year thereafter.

The holders of Series P Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series Q (the “Series Q Preferred Shares”), subject to certain conditions, on March 1, 2024 and on March 1 of every fifth year thereafter. The holders of Series Q Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.50 per cent.

Enbridge has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional two million Series P Preferred Shares at a price of $25.00 per share.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by TD Securities Inc., CIBC World Markets, RBC Capital Markets, and Scotia Capital Inc.

Enbridge has become a major player in the FixedReset space. Extant issues are:

ENB FixedResets Outstanding
Ticker Initial
Dividend		 Issue
Reset
Spread		 Reset
Date
ENB.PR.B $1.00 240bp 2017-6-1
ENB.PR.D $1.00 237bp 2018-3-1
ENB.PR.F $1.00 251bp 2018-6-1
ENB.PR.H $1.00 212bp 2018-9-1
ENB.PR.N $1.00 265bp 2018-12-1

Update, 2012-9-5: Supersize me!

Enbridge Inc. (TSX:ENB)(NYSE:ENB) today announced that as a result of strong investor demand for its previously announced offering of cumulative redeemable preference shares, series P (the “Series P Preferred Shares”), the size of the offering has been increased to 16 million shares. The aggregate gross proceeds will be $400 million.

Update, 2012-9-7:Pfd-2(low) by DBRS

New Issues

New Issue: BAM FixedReset 4.20%+263

Brookfield Asset Management has announced:

that it has agreed to issue 8,000,000 Class A Preferred Shares, Series 34 on a bought deal basis to a syndicate of underwriters led by TD Securities Inc., CIBC, RBC Capital Markets and Scotia Capital Inc. for distribution to the public. The Preferred Shares, Series 34 will be issued at a price of CDN$25.00 per share, for aggregate gross proceeds of CDN$200,000,000. Holders of the Preferred Shares, Series 34 will be entitled to receive a cumulative quarterly fixed dividend yielding 4.20% annually for the initial period ending March 31, 2019. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 2.63%.

Brookfield has granted the underwriters an option, exercisable until 48 hours prior to closing, to purchase up to an additional 2,000,000 Preferred Shares, Series 34 which, if exercised, would increase the gross offering size to CDN$250,000,000. The Preferred Shares, Series 34 will be offered in all provinces of Canada by way of a supplement to Brookfield Asset Management’s existing short form base shelf prospectus dated June 7, 2011 as amended on June 13, 2012. The Preferred Shares, Series 34 may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from the registration requirements under the U.S. Securities Act.

Brookfield intends to use the net proceeds of the issue of Preferred Shares, Series 34 to redeem its Class A Preference Shares, Series 11 and for general corporate purposes. The offering of Preferred Shares, Series 34 is expected to close on or about September 12, 2012.

The Series 11 preferred shares that will be redeemed are BAM.PR.I, an OperatingRetractible.

Issue Comments

New Issue: BIR FixedReset 8.00%+683

On July 17, Birchcliff Energy announced:

it has entered into an agreement with a syndicate of underwriters, which have agreed to purchase, on a bought deal basis, 1.6 million preferred units (“Preferred Units”) at a price of $25.00 per Preferred Unit, for total gross proceeds of $40 million (the “Offering”).

Each Preferred Unit will consist of one Cumulative 5-Year Rate-Reset Preferred Share, Series A (the “Series A Preferred Shares”) and 3 common share purchase warrants issued by Birchcliff (the “Warrants”), with each Warrant providing the right to purchase one (1) common share in the capital of Birchcliff (“Common Shares”) at an exercise price of $8.30 per Common Share for a period of two years. The syndicate of underwriters is co-led by GMP Securities L.P., Cormark Securities Inc. and National Bank Financial Inc., and includes HSBC Securities (Canada) Inc., Raymond James Ltd., Macquarie Group Ltd. and Peters & Co. Limited.

The Series A Preferred Shares will pay cumulative dividends of $2.00 per share per annum, payable quarterly if, as and when declared by Birchcliff’s board of directors (with the first quarterly dividend to be paid on September 30, 2012 (or the next business day)), for the initial five year period ending September 30, 2017. The dividend rate will be reset on September 30, 2017 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 6.83 per cent. The Series A Preferred Shares will be redeemable by the issuer on or after September 30, 2017, in accordance with their terms.

Holders of the Series A Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series B (the “Series B Preferred Shares”) subject to certain conditions, on September 30, 2017 and on September 30 every five years thereafter. Holders of the Series B Preferred Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 6.83 per cent, if, as and when declared by Birchcliff’s board of directors.

The Preferred Units will be offered for sale to the public in each of the provinces of Canada other than Quebec pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities in such provinces. The Offering is scheduled to close on or about August 8, 2012, subject to certain conditions, including obtaining all necessary regulatory approvals.

The deal was quickly upsized:

Birchcliff Energy Ltd. (“Birchcliff” or the “Corporation”) (TSX: BIR) is pleased to announce that Birchcliff has increased the size of its previously announced bought deal preferred unit offering to $50 million, from $40 million. Birchcliff will issue a total of two (2) million preferred units (“Preferred Units”) at a price of $25.00 per Preferred Unit, for total gross proceeds of $50 million (the “Offering”).

The deal closed today:

Birchcliff Energy Ltd. (“Birchcliff” or the “Corporation”) (TSX: BIR) is pleased to announce that it has closed its previously announced bought deal preferred unit financing of two million preferred units of Birchcliff (“Preferred Units”) at a price of $25.00 per Preferred Unit, for gross proceeds of $50 million (the “Offering”). Each Preferred Unit is comprised of one cumulative redeemable 5-year rate reset preferred share, series A (a “Series A Preferred Share”) of Birchcliff, to yield initially 8.00% per annum; and three common share purchase warrants (each a “Warrant”) of Birchcliff. Each Warrant provides the right to purchase one common share (a “Common Share”) of the Corporation for a period of two years from the closing date of August 8, 2012, at a price of $8.30 per Common Share. Birchcliff now has two million Series A Preferred Shares, six million Warrants and 141,475,311 Common Shares outstanding.

The prospectus is available on SEDAR, dated July 30, 2012. I am not permitted to link to this public document due to soon-to-be-bank-owned CDS’ abusive exploitation of its cosy little contract with the regulators.

The prospectus states:

The Series A Preferred Shares, the Series B Preferred Shares, the Warrants and the Common Shares are not rated by any credit rating agency.

This means the issue will not be tracked by HIMIPref™. The presence of a credit rating serves as a public flashpoint, downgrades in which will often persuade an otherwise complacent Board and management to take decisive action to fix it. If Hymas Investment Management downgrades an issue – so what? If S&P downgrades an issue and it gets into the papers – that’s a little more serious.

BIR.PR.A had good volume but lousy results on its first day of trading, with 102,370 shares changing hands in a range of 22.25-23.25. The closing quote was 23.00-50, 14×1. The warrants did quite well, trading 349,150 in a range of 1.00-25, closing at 1.12-20, 8×1, so purchasers of the $25 units of one preferred and three warrants have done quite well so far!

Issue Comments

New Issue: AX.PR.A FixedReset 5.25%+406

Artis REIT announced on July 24:

a marketed public offering (the “Financing”) of approximately $50 million Cumulative 5-Year Rate Reset Preferred Trust Units, Series A (the “Series A Units”) at a price of $25 per Series A Unit. The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”). Artis has also granted the Underwriters an over-allotment option, exercisable at any time up to 30 days after the closing of the Financing, to purchase additional Series A Units, up to an amount equal to 15% of the number of Series A Units sold pursuant to the Financing. The Financing will be priced in the context of the market with the final terms of the Financing to be determined at the time of pricing.

The Series A Units will pay fixed cumulative preferential distributions, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five-year period ending September 30, 2017. The first quarterly distribution, if declared, shall be payable on September 30, 2012. The distribution rate will be reset on September 30, 2017 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and a spread which will be set upon pricing of this Financing. The Series A Units are redeemable by Artis, at its option, on September 30, 2017 and on September 30 of every fifth year thereafter.
Holders of Series A Units will have the right to reclassify all or any part of their Series A Units as Cumulative Floating Rate Preferred Trust Units, Series B (the “Series B Units”), subject to certain conditions, on September 30, 2017 and on September 30 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement). Holders of Series B Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus a spread which will be set upon pricing of this Financing.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012. The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

Artis continues to enjoy a strong deal flow pipeline, with a continued focus on the accretive acquisition of quality commercial properties, in select markets in Canada and the U.S.

The issue was priced the following day:

announced today that is has priced its previously announced marketed public offering (the “Financing”) of Cumulative 5-Year Rate Reset Preferred Trust Units, Series A (the “Series A Units”). Artis will issue 3 million Series A Units at a price of $25 per Series A Unit for gross proceeds to Artis of $75,000,000.

The Financing is being led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”). Artis has also granted the Underwriters an over-allotment option, exercisable at any time up to 30 days after the closing of the Financing, to purchase up to an additional 450,000 Series A Units.

The Series A Units will pay fixed cumulative preferential distributions of $1.3125 per unit per annum, yielding 5.25% per annum, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, for the initial approximately five-year period ending September 30, 2017. The first quarterly distribution, if declared, shall be payable on September 30, 2012 and shall be $0.2122 per unit, based on the anticipated closing of the offering of Series A Units of August 2, 2012. The distribution rate will be reset on September 30, 2017 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield and 4.06%. The Series A Units are redeemable by Artis, at its option, on September 30, 2017 and on September 30 of every fifth year thereafter.

Holders of Series A Units will have the right to reclassify all or any part of their Series A Units as Cumulative Floating Rate Preferred Trust Units, Series B (the “Series B Units”), subject to certain conditions, on September 30, 2017 and on September 30 of every fifth year thereafter. Such reclassification privilege may be subject to certain tax considerations (to be disclosed in the prospectus supplement). Holders of Series B Units will be entitled to receive a floating cumulative preferential distribution, payable on the last day of March, June, September and December of each year, as and when declared by the board of trustees of Artis, at a rate equal to the sum of the then 90-day Government of Canada Treasury Bill yield plus a spread of 4.06%.

The Financing is being made pursuant to the REIT’s base shelf prospectus dated June 15, 2012. The terms of the offering will be described in a prospectus supplement to be filed with Canadian securities regulators. The Financing is expected to close on or about August 2, 2012 and is subject to regulatory approval.

Artis intends to use the net proceeds from the Financing to fund future acquisitions, repay indebtedness, and for general trust purposes.

Artis continues to enjoy a strong deal flow pipeline, with a continued focus on the accretive acquisition of quality commercial properties, in select markets in Canada and the U.S.

And they announced on August 2:

it has closed its previously announced marketed public offering (the “Financing”) of Cumulative 5-Year Rate Reset Preferred Trust Units, Series A, (“the Series A Units”), through a syndicate of underwriters led by RBC Capital Markets, CIBC and Macquarie Capital Markets Canada Ltd. (the “Underwriters”). Pursuant to the Financing, Artis issued 3.0 million Series A Units at a price of $25 per Series A Unit for gross proceeds to Artis of $75,000,000.

Artis has granted the Underwriters an over-allotment option, exercisable at any time up to 30 days after the closing of the Financing, to purchase up to an additional 450,000 Series A Units.

Artis intends to use the net proceeds from the Financing to repay indebtedness, fund future acquisitions, and for general trust purposes.

According to the prospectus supplement (available at SEDAR dated July 25, 2012; I am not permitted to link to it directly due to the cosy little contract the soon-to-be-bank-owned CDS has signed with regulators), “The Series A Units and the Series B Units are not rated by any rating agency.” Accordingly, the issue will not be tracked by HIMIPref™. As I have stated so often that people are getting sick of the repetition, this policy is not because I don’t think I can analyze the credit quality myself, and not because I worship the rating agencies … but because a public credit rating serves as a useful public flash-point during times of stress. It’s always useful to give the directors something to talk about over lunch!

Taxation is complicated: “Artis’ income and net taxable gains for the purposes of the Tax Act will be allocated to the holders of Units and Preferred Units in the same proportion as the distributions received by such holders.” In 2011, Unitholder distributions were 100% return of capital and this was also the case in 2010.

New Issues

New Issue: TA FixedReset 5.00%+365

TransAlta Corporation has announced:

that it has agreed to issue to a syndicate of underwriters led by CIBC, RBC Capital Markets and Scotiabank for distribution to the public 6,000,000 Cumulative Redeemable Rate Reset First Preferred Shares, Series E (the “Series E Shares”). The Series E Shares will be issued at a price of $25.00 per Series E Share, for aggregate gross proceeds of $150 million. Holders of the Series E Shares will be entitled to receive a cumulative quarterly fixed dividend yielding 5% annually for the initial period ending September 30, 2017. Thereafter, the dividend rate will be reset every five years at a rate equal to the 5-year Government of Canada bond yield plus 3.65%.

Holders of Series E Shares will have the right, at their option, to convert their shares into Cumulative Redeemable Floating Rate Reset First Preferred Shares, Series F (the “Series F Shares”), subject to certain conditions, on September 30, 2017 and on September 30 every five years thereafter. Holders of the Series F Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 3.65%.

TransAlta Corporation has granted the underwriters an option, exercisable in whole or in part prior to closing, to purchase up to an additional 3,000,000 Series E Shares at the same offering price. The Series E Shares will be offered by way of prospectus supplement under the short form base shelf prospectus of TransAlta Corporation dated November 15, 2011. The prospectus supplement will be filed with securities regulatory authorities in all provinces of Canada.

The net proceeds of the Offering will be used to partially fund capital projects, for other general corporate purposes and to reduce short term indebtedness of the Corporation and its affiliates. The offering is expected to close on or about August 10, 2012.

TransAlta was recently downgraded to P-3 by S&P and the shelf registered preferreds were downgraded to (P)Ba2 by Moody’s. DBRS has them at Pfd-3, Review-Developing.

Update, 2012-8-3: Provisionally rated Pfd-3 by DBRS.

New Issues

New Issue: BIR FixedReset 8.00%+683

Birchcliff Energy has announced:

that it has entered into an agreement with a syndicate of underwriters, which have agreed to purchase, on a bought deal basis, 1.6 million preferred units (“Preferred Units”) at a price of $25.00 per Preferred Unit, for total gross proceeds of $40 million (the “Offering”).

Each Preferred Unit will consist of one Cumulative 5-Year Rate-Reset Preferred Share, Series A (the “Series A Preferred Shares”) and 3 common share purchase warrants issued by Birchcliff (the “Warrants”), with each Warrant providing the right to purchase one (1) common share in the capital of Birchcliff (“Common Shares”) at an exercise price of $8.30 per Common Share for a period of two years. The syndicate of underwriters is co-led by GMP Securities L.P., Cormark Securities Inc. and National Bank Financial Inc., and includes HSBC Securities (Canada) Inc., Raymond James Ltd., Macquarie Group Ltd. and Peters & Co. Limited.

The Series A Preferred Shares will pay cumulative dividends of $2.00 per share per annum, payable quarterly if, as and when declared by Birchcliff’s board of directors (with the first quarterly dividend to be paid on September 30, 2012 (or the next business day)), for the initial five year period ending September 30, 2017. The dividend rate will be reset on September 30, 2017 and every five years thereafter at a rate equal to the five-year Government of Canada bond yield plus 6.83 per cent. The Series A Preferred Shares will be redeemable by the issuer on or after September 30, 2017, in accordance with their terms.

Holders of the Series A Preferred Shares will have the right, at their option, to convert their shares into Cumulative Floating Rate Preferred Shares, Series B (the “Series B Preferred Shares”) subject to certain conditions, on September 30, 2017 and on September 30 every five years thereafter. Holders of the Series B Preferred Shares will be entitled to receive cumulative quarterly floating dividends at a rate equal to the three-month Government of Canada Treasury Bill yield plus 6.83 per cent, if, as and when declared by Birchcliff’s board of directors.

The Preferred Units will be offered for sale to the public in each of the provinces of Canada other than Quebec pursuant to a short form prospectus to be filed with Canadian securities regulatory authorities in such provinces. The Offering is scheduled to close on or about August 8, 2012, subject to certain conditions, including obtaining all necessary regulatory approvals.

The market said Supersize me!

Birchcliff has increased the size of its previously announced bought deal preferred unit offering to $50 million, from $40 million. Birchcliff will issue a total of two (2) million preferred units (“Preferred Units”) at a price of $25.00 per Preferred Unit, for total gross proceeds of $50 million (the “Offering”).

This issue will not be tracked by HIMIPref™

  • It is too small
  • It has no credit rating. As I have noted before, I am very much in favour of issues having credit ratings – not because I can’t take my own view and not because I worship the credit rating agencies, but because a credit rating and downgrade thereof serves as a public flashpoint that serves to increase pressure on the company to take drastic measures, if necessary, when things go wrong.

Thanks to Assiduous Reader mpisni for bringing this issue to my attention.

New Issues

New Issue: ENB FixedReset 4.00%+265

Enbridge Inc. has announced:

that it has entered into an agreement with a group of underwriters to sell 10 million cumulative redeemable preference shares, series N (the “Series N Preferred Shares”) at a price of $25.00 per share for distribution to the public. Closing of the offering is expected on July 17, 2012.

The holders of Series N Preferred Shares will be entitled to receive fixed cumulative dividends at an annual rate of $1.00 per share, payable quarterly on the 1st day of March, June, September and December, as and when declared by the Board of Directors of Enbridge, yielding 4.00 per cent per annum, for the initial fixed rate period to but excluding December 1, 2018. The first quarterly dividend payment date is scheduled for December 1, 2012. The dividend rate will reset on December 1, 2018 and every five years thereafter at a rate equal to the sum of the then five-year Government of Canada bond yield plus 2.65 per cent. The Series N Preferred Shares are redeemable by Enbridge, at its option, on December 1, 2018 and on December 1 of every fifth year thereafter.

The holders of Series N Preferred Shares will have the right to convert their shares into cumulative redeemable preference shares, series O (the “Series O Preferred Shares”), subject to certain conditions, on December 1, 2018 and on December 1 of every fifth year thereafter. The holders of Series O Preferred Shares will be entitled to receive quarterly floating rate cumulative dividends, as and when declared by the Board of Directors of Enbridge, at a rate equal to the sum of the then 90-day Government of Canada treasury bill rate plus 2.65 per cent.

Enbridge has granted to the underwriters an option, exercisable at any time up to 48 hours prior to the closing of the offering, to purchase up to an additional two million Series N Preferred Shares at a price of $25.00 per share.

The offering is being made only in Canada by means of a prospectus. Proceeds will be used to partially fund capital projects, to reduce existing indebtedness and for other general corporate purposes of the Corporation and its affiliates.

The syndicate of underwriters is co-led by RBC Capital Markets, CIBC, Scotiabank, and TD Securities Inc.

This will join the other Enbridge FixedResets:

  • ENB.PR.B, 4.00%+240
  • ENB.PR.D, 4.00%+237
  • ENB.PR.F, 4.00%+251
  • ENB.PR.H, 4.00%+212

All of these were bid in the neighborhood of 25.50 on July 6.

New Issues

New Issue: GWO Straight Perpetual 5.15%

Great-West Lifeco has announced that it:

has today entered into an agreement with a syndicate of underwriters co-led by BMO Capital Markets, RBC Capital Markets and Scotiabank, under which the underwriters have agreed to buy, on a bought deal basis, 6,000,000 Non-Cumulative First Preferred Shares, Series Q (the “Series Q Shares”) from Lifeco for sale to the public at a price of $25.00 per Series Q Share, representing aggregate gross proceeds of $150 million.

Lifeco has granted the underwriters an underwriters’ option to purchase an additional 2,000,000 Series Q Shares at the same offering price. Should the underwriters’ option be fully exercised, the total gross proceeds of the Series Q Shares offering will be $200 million.

The Series Q Shares will yield 5.15% per annum, payable quarterly, as and when declared by the Board of Directors of the Company. The Series Q Shares will not be redeemable prior to September 30, 2017. On or after September 30, 2017, the Company may, on not less than 30 nor more than 60 days’ notice, redeem the Series Q Shares in whole or in part, at the Company’s option, by the payment in cash of $26.00 per Series Q Share if redeemed prior to September 30, 2018, of $25.75 per Series Q Share if redeemed on or after September 30, 2018 but prior to September 30, 2019, of $25.50 per Series Q Share if redeemed on or after September 30, 2019 but prior to September 30, 2020, of $25.25 per Series Q Share if redeemed on or after September 30, 2020 but prior to September 30, 2021 and of $25.00 per Series Q Share if redeemed on or after September 30, 2021, in each case together with all declared and unpaid dividends up to but excluding the date fixed for redemption.

The Series Q Shares offering is expected to close on July 6, 2012. The net proceeds will be used for general corporate purposes and to augment Lifeco’s current liquidity position.

This will be characterized in the HIMIPref™ database as a DeemedRetractible; which is to say, analysis will assume a maturity 2022-1-31 at 25.00, although this is not in the formal terms of the issue.